How bullet trains can help the Indian economy

An idea whose time has come, high-speed railways can help economy in numerous ways

Vivian Fernandes | July 8, 2014

China’s CRH1 clocks between 220 and 250 kmph.
China’s CRH1 clocks between 220 and 250 kmph.

[This article originally appeared in the November 1, 2012 issue of Governance Now.]

The railway ministry has reverted to the Congress after 17 years. Its last railway minister was CK Jaffer Sharief, who quit the post in October 1995. Since then there has been a procession of ministers from the Lok Janshakti Party, the Janata Dal (United), the Bharatiya Janata Party, the Trinamool Congress and the Rashtriya Lok Dal. Some like Nitish Kumar and Lalu Prasad have done good work; others have left the ministry worse off than when they assumed the portfolio. Hopefully, the prime minister will place a mover-and-shaker in Rail Bhavan.
The railways should have been the locomotive of the Indian economy. They are a drag. The previous minister, Mukul Roy of the Trinamool Congress, reversed the hike in fares announced by his cashiered colleague Dinesh Trivedi. Out of sheer pique, he also abolished the two railway board posts – the member (safety) and the member (public-private partnership) – that Trivedi had created in a novel attempt at restructuring the board along business, not functional, lines. Unable to generate resources, the railways have pruned the already inadequate investment in creation of new assets and replacement of worn-out ones.

When the railways are pre-occupied with getting their day-to-day affairs in order – finding money to pay salaries, pension and the fuel bill – it would be a bold  step for a person to suggest that they set their sights high and push for high-speed rail. But there is no time for the railway board to indulge in sequential thinking. The idea of high-speed railway can be processed in parallel. It requires a thrust from the prime minister, just as he gave one to the dedicated freight corridor.

The railways are already thinking of high-speed. Studies have been conducted to examine the profitability of six high-speed railway lines that were announced in the railway budget two years ago. These are:

Delhi-Chandigarh-Amritsar: 450 km
Pune-Mumbai-Ahmedabad: 650 km
Hyderabad-Dornakal-Vijaywada-Chennai: 664 km
Chennai-Bangalore-Coimbatore-Ernakulam: 649 km
Howrah- Haldia: 135 km
Delhi-Agra-Lucknow-Varanasi-Patna: 991 km

A bill has been drafted to give legal backing to a high-speed rail authority. The structure that has been proposed is that of a company and not a department of the government, or an adjunct of the railways. Apart from a chairman and four functional members looking after planning, finance, technical matters and projects, it will have representatives of the railway, urban development and finance ministries and also of the planning commission. Besides, there will be nominees of banks and shareholders.

The authority will fix fares, rates and rentals. It will develop industrial, commercial and residential property to augment revenue from the movement of people. This is because high-speed railways, though economically beneficial, cannot be profitable only from ticket sales. The authority will not take the cost of projects on its books. These will be funded through special purpose companies and the authority will dilute its equity once a project gets going. It has been given a target of 500 km of high-speed rail by 2015. By 2025, it should stretch the network to 2,000 km and connect all cities with a population of more than 25 lakh.

Until two decades ago, China had a rail network smaller than ours. Not only has it overtaken India, it has laid 6,000 km of high-speed rail, while India has none. In July the state council, which is equivalent to India’s cabinet, approved a plan to add 40,000 km of high-speed rail by 2015 and connect all cities with a population of more than 50 lakh.

As India’s economy grows and people get richer, India will need an efficient way of moving a large number of people quickly over long distances. It cannot depend on air travel alone for reasons of energy efficiency and climate change concerns. Trains use one-fifth of the energy of airplanes and the carbon emission per passenger is much lower.

According to the European Commission’s 2011 white paper on transport, high-speed railways are 14 times less carbon intensive than cars or 15 times more frugal than air travel. A high-speed train will release 11 grams of carbon dioxide while moving a passenger between Valence and Marseille in southeast France, against 151 grams by car and 164 grams by air.
Unlike the dedicated freight corridor, which is a congestion-free track for faster running of conventional trains, high-speed passenger movement will have technological spin-offs. By swapping high-value contracts for joint ventures with the world’s leading railway manufacturers, China has been able to offer MNC technology at Chinese prices. India can do likewise.

High-speed trains will decongest the highways and ease the pressure on air travel. They can compete with planes on time and cost over medium distances of 500 km to 700 km. Unlike planes they also make possible the development of new planned townships between terminals, as there can be stops every 100 km. This will reduce the congestion in metros.

According to Ircon International, the Delhi-Patna high-speed track via Agra, Lucknow and Varanasi will cost Rs 4.73 lakh crore. It says the service will be profitable even in the worst-case demand scenario. It expects 15 eight-car trains to carry 57,000 passengers daily at a maximum speed of 300 km an hour when operations commence in 2020 going up to 44 sixteen-car trains by 2045. The fares will be pretty steep: Rs 7,000 for second class and Rs 9,100 (that is, 30 percent more) for first class. The spot airfare between Delhi and Patna now is Rs 6,700, but tickets booked a month in advance cost much less: Rs 3,500. Ircon perhaps expects inflation to do the trick and make high-speed fares competitive.

On June 30 last year, China Rail inaugurated a high-speed service which compressed travel time between the two cities to just five hours. Delhi and Mumbai (1,380 km) are about as distant as Beijing and Shanghai (1,320 km). A second-class seat on the train costs Rs 4,400 (RMB 550) and a first class seat Rs 7,500 (RMB 935). Airlines charge between Rs 4,500 and Rs 7,500 for travel between Delhi and Mumbai, though fares can be as low as Rs 3,600. There is little advantage in flying if apart from the flight time of two hours, an equal amount of reporting time and time spent on arriving at the airport and reaching the destination at the other end are added (because airports tend to be outside cities). Superfast trains would knock the stuffing out air carriers. They could easily capture most of the 64,000 weekly air seats. The Center for Asia-Pacific Aviation says Beijing-Shanghai airfares slumped by half after the launch of bullet trains.

But Chinese costing is suspect. Though high-speed fares are three times higher than those of normal trains (forcing migrants to travel by buses), there might be a large element of subsidy involved. At $31 billion or Rs 1.61 lakh crore, the Shanghai-Beijing fast track is the costliest infrastructure project in the Chinese history, and more draining than even the Three Gorges dam. It is unlikely to make money. Since India cannot afford such gigantic monuments, the Japanese have proposed a semi-high-speed track between Delhi and Mumbai. The existing track is said to be suitable for an hourly speed of 200 km, up from a maximum of 160 km now, with fencing of tracks, road-over bridges, improved civil and electrical structures, electrical engines capable of quick acceleration and deceleration, coaches with titling technology for speeding on curves and better signalling.

When the freight corridor becomes operational between Delhi and Mumbai, 60 percent of freight trains are expected to shift to it on the Delhi-Godhra stretch, and 90 percent of them on the Godhra-Mumbai leg, according to a Japanese study. The capacity released will make it possible to run faster passenger trains at semi-high speeds of up to 200 km an hour on the existing track.

Japan is keen to invest in this project in order to boost its exports of railway equipment worth a hundred billion yen or $1.27 billion currently. It is providing low-cost loans to the freight corridor (though yen appreciation and mandatory procurement from Japanese companies raise the tab) and has also picked up a stake in the company developing industrial enclaves alongside. It has studied three routes to connect the two cities, via Ajmer, Kota or Udaipur. A track of 12-hour travel time between Delhi and Mumbai is expected to cost a little less than $7 billion or Rs 38,500 crore. A 10-hour journey time track, on the other hand, will cost more – over $16 billion. The slower track is said to be financially viable.

There is renewed interest in high-speed railways the world over. The European Commission wants to expand the network by three times by 2030. Japan has 2,388 km of bullet track. France wants to triple the network in 30 years from the current length of 1,900 km. Britain has one high-speed line. It was opened in 2007. It is a 108-km track that connects London with Kent (and proceeds via the Chunnel to Paris or Brussels). In July, Britain announced a 9.4 billion pound package to upgrade the high-speed rail network in the five years to 2019. There is talk but not enough political backing for another high-speed line between London and Manchester and Leeds via Birmingham for a price tag of 30 billion pounds or Rs 2.57 lakh crore.
The Manmohan Singh government should not worry about the little time left of its second term. Just as it revived the scandal-ridden Satyam Computers, it should entrust the execution of high-speed railways to a committee of wise men. They could make it a trophy that every Indian can be proud of, like JRD Tata’s Air India.

(The author is a senior journalist)



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